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How to clear the balance of a foreign currency bank balance in the AUD accounts

Carolyn_9716443

We have several foreign currency bank accounts which I reconcile every month. At the end of each financial year the accountants post an amount to a "Currency Conversion" account (for want of a better name) that shows the balance of the foreign accounts closing balance in the AUD equivalent. Several of the foreign currency bank accounts have now been closed.

How do I clear the AUD equivalent amount that is still showing up in the Balance Sheet - as I have a nil balance in my reconciliation. I can't post directly to the bank account as it will only accept the overseas currency of the account - and will affect my reconciliation.

Do I have to keep the balances in my accounts with the "Currency Conversion" account showing the clearing amount?

It all looks very messy.

Accepted answers

Datarec

Hi @Carolyn_9716443

You likely would need to make use of the "Home Currency Adjustment" function.

Here are some Community Posts related to that.

Home Currency Adjustment - Reckon Community

In the Reckon Accounts Hosted application, you can:

1. Click on the Help menu, select "Reckon Accounts Help"

2. In Index tab search for "home currency"

3. Select the help article "adjustments due to gain/loss"

All comments

Datarec

Hi @Carolyn_9716443

You likely would need to make use of the "Home Currency Adjustment" function.

Here are some Community Posts related to that.

Home Currency Adjustment - Reckon Community

In the Reckon Accounts Hosted application, you can:

1. Click on the Help menu, select "Reckon Accounts Help"

2. In Index tab search for "home currency"

3. Select the help article "adjustments due to gain/loss"

Acctd4

Not sure why the accountant is doing that ? 🤔🤔🤔🤔

When multicurrency is enabled, the system automatically adds an Exchange Gain/Loss (Exp) account so that any exchange difference can be reflected at the time.

If you update the exchange rate at the time of payment (eg actual payment total v initial Bill entry total) the system will actually recalculate the AUD value & post it to there for you, automatically! 😊

💡 To do this, just divide the foreign amount by the AUD amount (or vice versa, depending on direction)

You can then use the system's Realised Gains & Losses report to view these movements (NOTE: The Unrealised … report shows unpaid eg open Bills, Invoices, whereas the Realised … one displays & totals the differences, once paid)

Carolyn_9716443

Hi. I do use the exchange rate at the time but the accountants bring the foreign currency value at the 30 June into the books which means there is an adjustment from what has been posted.

Also, even if the accountant did nothing the overseas value would be nil but because of the exchange differences the AUD value is not the same - hence an AUD balance I need to get rid of.

Acctd4

OK, so the accountant is adjusting for UNREALISED gains/losses which is necessary for tax purposes … but the other side would normally be posted to an income/expense account as applicable, rather than a balance sheet account 🤔

Often this GJ will be reversed on 01/07, to allow for the current year actual movements (realised) 😬

Carolyn_9716443

I have read the articles re making a home currency adjustment but just want to clarify that if I am doing one journal to align my accounts with those of the accountant that I just enter all the other accounts that need to be amended - and then tick the Home Currency Adjustment box 🤔

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